Valuelytics, a developer of analytics to help customers make better decisions, today announced the availability of its CreditValue application and related services for valuing credit market portfolios including CMOs, CDOs, SIVs and other securitized portfolios.
CreditValue was developed from the Company's ValuelyticEngine, a technology platform that combines proprietary data quality hygenics, patented valuation methodologies and predictive algorithms. The Company's analytics enable users to identify and unlock value for decision-making. CreditValue is an application developed to target the unique valuation challenges of structured finance credit portfolios.
After four years of development, the Company's patented analytic technology platform was combined with additional Company IP to begin development of market specific application prototypes. CreditValue is the second application developed by Valuelytics. It follows the Company's successful development of FS-Value announced during October 2008. FS-Value is the Company's dynamic relative value, fundamental quant application that can be deployed across multiple industry sectors to construct portfolios that generate significant investment returns for institutional investors. FS-Value produced a 16.7% return in a tracking portfolio for 2008.
"Valuelytics' capabilities for the financial markets evolved from our unique approach," said Jim Flanagan president and CEO of Valuelytics and a financial industry veteran. "Our technology is based upon data analytics and statistics, not markets and applications. As a result, we are not constrained by a view or bias of the financial markets. Our technology is data-agnostic, as a result it can be applied to virtually any type of comparative data, giving the Company multiple market opportunities where we can add value. Our focus at this time is to target specific elements of the equity and debt markets where we can unlock more value for portfolio managers," noted Flanagan.
Valuelytics Founder Gary Field commented, "One of the opportunities we find intriguing is the front-page issues in the credit markets. Valuelytics has unique capabilities in this regard. I previously founded and successfully ran a mortgage brokerage business for more than eleven years. As a result, I understand both the housing and mortgage markets. I also saw first hand the beginnings of the problems created by overly aggressive loan products as lenders and Wall Street firms battled for larger and larger market shares and increased profits. In addition, Jim Flanagan our CEO, was a pioneer during the 1980's in the creation of structured finance vehicles and asset-securitizations. Our unique backgrounds, combined with our ValuelyticEngine provide us with the insight and understanding that we can bring to potential partner institutions though our consulting services."
"We have the capability to identify value at multiple levels including from the portfolio view as a whole, to a specific tranche or down to the individual security level," noted Field. "Because our analytic identifies relative value within a portfolio of similar securities, we believe there is tremendous opportunity to identify value within the illiquid and distressed funds of CMOs, CDOs, SIVs and other credit market portfolios. These types of investments continue to be the focal point of the turmoil in the financial markets.
"We recently analyzed two large mortgage portfolios while working with a large, well-known financial institution. In this limited scope test, we were able to analyze more than ten thousand individual mortgage securities in a few minutes. We were able to determine which portfolio reflected the greater value to the institution. With our personal knowledge and experience in mortgages and securitized products, along with the insight we gained from this small test case, we believe there is sufficient additional opportunity for us to identify and help unlock more value for portfolio managers from both a valuation perspective and through assessment of risk", noted Field.
"Valuelytics is currently seeking partner firms where we can add value and realize mutual benefits through the use of our technology and services. We have the capability to tune our ValuelyticEngine to specific needs because our object-oriented technology platform enables rapid custom development time. With the resources of a large, highly reputable partner institution supporting us, we should be able to make rapid assessments of the optimal credit market opportunity for our analytic. In the meantime, applying our analytic through our consulting services will also aid this fine tuning process," concluded Field.
Price discovery and valuation in both the public and private markets became impossible over the past year, in part because of valuation models and applications that were static in design. When the markets suddenly changed, these static models were unable to adapt to the changes in security or market fundamentals. When that happens, as we have seen, price discovery and thus valuation became impossible. We believe the 'dynamic' characteristics of our ValuelyticEngine addresses this challenge since our Engine continues to build quantitative valuation models when the data changes. This fact and because we are data-agnostic are two powerful differentiators in applying the quantitative solutions that we are bringing to the markets," noted Flanagan.